tisdag 27 juli 2010

Incredibly inefficient coal handling at Riga

A good example of how the Latvian economy has failed to develop as well as it might, and a reminder of how the economy is still tightly tied in to the former COMECON system can be seen as one enters the country by boat. A huge coal export terminal is spread out along the river frontage on the approach to Riga. The coal, mined in Russia, is delivered in enormously long trains composed of trucks with the word HOBOTPAHC (NOVOTRANS) in giant letters on the side. It is not an appropriate name. There is nothing novel about these trucks. They do not have hoppers underneath for unloading and the coal has to be scooped out by cranes, dozens of them. It is piled up in great heaps and reloaded into the holds of ships which go to a variety of destinations including the UK.

This unnecessary double-handling is a clear example of job preservation for the sake of it. In a modern system the trucks would have hopper doors underneath. The coal would drop onto chutes and fall straight into the holds of the waiting ships. The principle was established in Britain with merry-go-round coal trains about forty years ago, with coal trains formed of hopper wagons operating in a circuit between the coal mines and large power stations. But even with the present wagons it would be more efficient to uncouple each one and empty it by turning it upside down, which was common even in the 1930s.

If jobs were plentiful, the system would have been modernised. Workers would have drifted away, there would have been pressure for more efficiency, and the remaining workers would have been higher paid. That is how the economy is meant to work in theory. Of course, if jobs are apparently in short supply, it is understandable that people want to hold onto them. But of course, without land value taxation, jobs will indeed be in short supply and there will be pressure to keep this kind of inefficient nonsense in being for as long as possible. In the end, economic reality will intrude painfully.